Safaricom to spend Sh1.6b on fibre optic lease in Ethiopia

Safaricom headquarters, Nairobi. [Wilberforce Okwiri, Standard]

Safaricom has signed a deal valued at over Sh1.6 billion to use Ethiopian Electric Power’s (EEP) dark fibre to provide telecommunications services in the Horn of Africa country.

The Ethiopian subsidiary, Safaricom Ethiopia, announced on Friday that the deal will see it use a network of optical ground wire (OPGW) cables already installed along the high voltage transmission lines owned by EEP.

The lease agreement, which will run for five years, saves Safaricom from making greenfield investment for the infrastructure that is used for services such as voice, text messages, data and video conferencing.

“Such infrastructure sharing agreements will enable us to fulfil our commitment to transform Ethiopian lives for a digital future and contributes to efforts being made to the phased operation launch,” said Safaricom Ethiopia chief executive Anwar Soussa.

The agreement covers the first phase of 4,097 kilometres while the second and third phase will be 2,078km and 2,904km optical fibre line rental respectively.

EEP said in a statement it expects to earn up to 140 million birr (Sh311.52 million) a year in the first phase of the deal, meaning Safaricom will part with at least Sh1.56 billion in five years.

EEP chief executive Asheber Balcha said the deal will see the firm increase its revenue, while enabling Safaricom Ethiopia to provide “quality and competitive telecommunication services.”

The state-owned electric producer currently has 15,000 kilometres of fibre optic cable. At least 8,745 kilometres are being used by Ethio Telecom on lease.

The deal comes barely a month after Safaricom unveiled its first China-assembled data centre in Addis Ababa, built at a cost of $100 million (Sh11.4 billion) as it gears up to launch commercial operations there next month.